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A l l H » M < I \ I V.ui 1 1 1 I ' ' " I M i l I I I I > I I I .1 I I
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V i l u i I i n i i n m i i u ) , I I H I P r o d u c t D e s i g n 19
Value Engineer ing : . . .
Takes Its Place i n
t h e T r a n s p o r t a t i o n
Indus t ry \ , / / ( / • l \ . > / / , / s A i m i i . i l I n d e x 2 2
All Roads Lead to Rome
EDITORIAL
Jack V. Michaels, Ph.D., P.E., CVS
The Romans were the greatest road
builders o f the ancient world. Given
the tools and materials they had at their
disposal, they were probably the greatest
road builders o f all time. I t is instructive
to compare some aspects o f the U.S.
Interstate Highway System wi th those o f
the Roman road system.
The Roman road system provided al l-
weather access to the most distant
provinces. The most well-known, the Via Appia (or Appian Way),
joined Rome wi th the city o f Capua and extended to the heel o f
Italy. The Via Flaminia connected Rome wi th the Roman colony
in former Celtic territory. In Britain and North Afr ica , as wel l as in
Italy, we can trace the path of Roman conquest by the growth o f
the Roman road system.
A l l told, the Romans built 50,000 miles o f roadways through
territory that today covers more than 30 countries. In truth, one
could say that " A l l roads lead to Rome." In fact, the access that this
network o f roads provided facilitated the spread o f Christianity.
The roads were remarkably durable and remained in use during
the Middle Ages. Parts of the roads are still in use today.
The U.S. Interstate Highway System has yet to match the
number of miles o f the Roman road system. The system was
instituted by the Federal A i d Highway Act o f 1944 as the National
System of Interstate and Defense Highways. The act authorized a
system of limited-access highways not to exceed 40,(XH) miles.
Subsequent legislation increased the limit lo 42,795 miles.
The U.S. Interstate Highway System is essentially completed.
The implementation has almost met the design criteria of carrying
20% of the nation's motor traffic, connecting all of ihe contincnial
United States, and reaching 90% of all Ihe U.S. cities wi lh
populations o f 50,000 or more.
As in the United States, road building was an important
function o f Roman rulers, whose functionaries awarded contracts
and supervised construction. As the roads were extended into the
provinces, responsibility for funding and work was assigned to the
provincial governors. These governors received subsidies f rom
Rome and frequently imposed tol l collection.
In the case o f the U.S. Interstate Highway System, the federal
government paid 90% of the cost and the states paid 10%. Several
states have converted portions o f the interstate highways within
their boundaries into tol l roads.
The reigning Roman emperor used inscriptions on milestones
along the provincial roads as a means o f asserting his authority and
advertising his benevolence. Here is a small sample o f what I
found while probing the U.S. Department o f Transportation's
Public Affa i rs Off ice on the Internet.
• Secretary Pena Announces Grant o f $79 M i l l i o n for Secaucus
Commuter
• Secretary Pena's Remarks at New York Waterway Loan
Guarantee Announcement
• D O T Announces $12.4 M i l l i o n Grant to New Jersey Transit
Corporation
• Transportation Secretary Pena Signs Agreement for Light
Rail Funding in Northeast New Jersey
• Secretary Pena Announces Airport Improvement Grants for
New Mexico
• D O T Gives $125 M i l l i o n in Federal Transit Funds to New
York's Queens Connector Project
The more things change, the more they remain the same. By
the way, only about half o f the roads in the United States are
paved. A l l roads still lead to Rome.
We are devoting an entire issue o f Value World to transportation
because o f the problems we face in the third millennium. I thank
SAVE International for inviting me to participate in this issue and
for the chance to talk again to the readers.
Goodnight and 30.
Jack V. Michaels, Ph.D., P.H., CVS, is editor emeritus of Value
World and contributed "Critical Technology in Transportation
Stuff Report," which appears on page 2 of this issue.
I H S Q W O R L D Volume 20, Number 1, March 1997 1
Critical Technology in Transportation Staff Report
Jack V. Michaels, Ph.D., P.E., CVS
INTRODUCTION
Advanced technology remains a dr iving force i n U.S.
economic prosperity and national security. Maintaining the
strength and competitiveness o f U.S. technological enterprises is
vital to the nation's interest. In the current climate o f intensifying
global competition, rapid technological change, geopolitical
uncertainties and limited resources, the need fo r identifying
critical technologies for concentration of effort has intensified.
Value World's staff adapted this article f r o m the "Report on the
Th i rd Biennial National Technologies Review," which was
obtained via the Internet f r o m the U.S. Department o f
Transportation's Bureau of Transportation Statistics. The report
covers the state o f the art f r o m 1990 through 1994, and designates
the technology areas and specific technologies that constitute
priorities for federal and industry-cooperative R & D efforts. For
transportation, the areas that need attention are aerodynamics,
avionics and controls, propulsion and power, systems integration,
and human interface.
AERODYNAMICS Aircraft Aerodynamics Aerodynamic efficiency is one o f the key parameters that
determines the weight and cost of an aircraft. Roughly speaking,
an aircraft's range is directly proportional to its aerodynamic
efficiency without any increase in fue l usage. Such fair ly recent
aerodynamic technologies as supercritical airfoils and winglets
have already provided substantial increases in aerodynamic
efficiency over first-generation jet transports, and there are many
emerging aerodynamics technologies worthy o f development and
implementation. One o f the most promising, especially for
improving efficiency in jet transports, is laminar f l o w control.
For commercial aircraft, improved aerodynamics reduces
operating costs, thereby making the aircraft more competitive on
international markets. I t also significantly contributes to the
national security by improving efficiency and performance o f
military aircraft.
Surface Vehicle Aerodynamics Surface vehicle aerodynamics provide the scientific foundations for
developing lower drag shapes for automobiles, buses, trucks, and
trains. As vehicle speed increases, aerodynamic drag becomes a
major contributor to vehicle inefficiency and increased fue l
consumption, higher levels of noise, and control problems.
Aerodynamically designed vehicles can be both quiet and
more efficient than existing vehicles, although current vehicles
already incorporate efficient aerodynamic shapes. Drag reduction
translates into reduced energy consumption and more efficient
vehicles, and ultimately lowers demand for foreign o i l .
AVIONICS AND CONTROLS The United States leads in most avionics and controls technology,
and is l ikely to maintain — but not increase — its edge over the
next several years. Two European f i rms , France's Sextant
Avionique and the United Kingdom's General Electric Company,
are challenging the leadership across a wide range of avionics
products; but, wi th the current downturn in military budgets and
commercial developments, few companies w i l l be wi l l ing to risk
large investments solely for the commercial market.
Aircraft and Spacecraft Avionics Several goals drive development o f f ly-by- l ight control systems:
increased resistance to electromagnetic interference and increased
bandwidth for data and weight reduction. Fly-by-light systems also
provide better protection against lightning strikes. Moreover, fiber
optic cables can carry vast amounts o f data and offer potential
weight advantages. The technology w i l l probably not be used in
commercial transports unti l the 21st century.
U.S. firms, led by McDonnel l Douglas, appear to have the lead
in f ly-by- l ight development. Much of the impetus for the U.S.
developments comes f r o m the Advance Research Projects
Agency's technology reinvestment program. The United States
also is the leader in ring laser gyro technology and has a slight lead
in fiber-optic gyroscopes, an alternative technology for aircraft
inertial-grade accuracy. U.S. manufacturers retain a lead in global
positioning systems receivers and processing equipment, largely
because of experience developing the satellite system.
Spacecraft avionics currently involves issues o f reliability,
space certification, miniaturization, reduced power consumption,
and "black box" modularity. Spacecraft control systems, on-board
navigation systems, and precise engine throttling would all benefit
f r o m further improvements in this area. There is a growing trend
toward the standardization and assembly o f building block
components to achieve a number o f different functions and, in this
way, avoid a requirement to develop a large quantity of special
purpose systems.
Surface Transportation Controls Surface transportation controls span applications, f r o m
microprocessor-based emissions-control systems for monitoring
2 Volume 20, Number 1, March 1997 P H I I H W O R L D
and controlling engine performance to reduce emissions and
optimize engine performance, to the myriad components that
would be essential to attain an intelligent vehicle highway system.
A critical examination o f the emissions control application
suggests that these systems may operate effectively for much of a
vehicle's useful l i fe ; but, ultimately, many of these systems may
degrade and exhibit highly variable behavior that is accompanied
by gross emissions o f hydrocarbons.
Thus, the issue is not to develop systems whose performance
when new is exemplary. Rather, i t is to develop reliable
maintenance-free emission control systems that w i l l operate at
close to new-car levels when a vehicle is wel l past 100,000 miles
and into its third, fourth, or f i f t h level o f ownership. This remains
a major challenge, particularly i f years o f neglect and poof ,
maintenance are considered. In general, i t seems plausible to think
that reliable emission control systems for exhaust and evaporative
emissions hold the key to reducing urban emissions and ozone
formation in many areas, particularly in California, where 40% of
vehicles have more than 100,000 miles on their odometers. The
United States is preeminent in this technology area, driven by our
commitment to clean air.
PROPULSION AND POWER Propulsion technologies are important to both national security
and economic prosperity because better engines improve fue l
economy, reduce maintenance costs, and allow designing a
smaller, cheaper aircraft to perform some required mission. The
interaction o f propulsion and aerodynamics is essential for
developing powered l i f t vehicles.
Aircraft Turbines In the turbojet engine, a key objective o f the last 40 years has been to
increase combustion temperatures for better efficiency and reduce
fuel consumption without burning up the turbine blades. This is done
by using better materials such as the ceramics mentioned elsewhere,
better cooling approaches, and better computational analysis
methods. Reduced emissions and noise are also becoming extremely
important for the civi l sector. Performance improvements in engine
technology historically have been driven by military programs, and
commercial engine development w i l l continue to benefit f rom
mUitary research efforts. The United States leads in aircraft turbine
engine technology, based on its superior military technology, but
shares the lead in commercial propulsion systems technology with
the United Kingdom's Rolls Royce.
Because o f the trend toward higher-thrust'engines, i n concert
wi th the trend toward larger aircraft, by the year 2000 deliveries o f
engines w i th greater than 45,000 lb. thrust are forecasted to
become more than 50% of the market by value. The trend toward
higher-thrust engines has two general consequences for the
competitiveness o f engine manufacturers. First, the higher costs
associated wi th development o f these large engines have led to
more jo in t international programs and the transfer o f technology
to second-tier manufacturers. Secondly, wi th the attention o f
technology leaders focused on the high-thrust end o f the market,
second-tier manufacturers are increasing their roles in the
development o f smaller engines.
Spacecraft Power Systems Spacecraft power systems provide power for spacecraft missions,
communications, and housekeeping functions. In the case o f lunar
or planetary missions that involve instrumented or human
landings, surface power systems also must be provided.
Efficiency, power density, reliability, environmental risk, safety,
and shielding must all be considered in any power system.
Space power systems are relevant to both economic progress
and national security. They contribute to sustainable economic
growth through promoting efficient energy production and
utilization technology, and help the environmental monitoring and
assessment function through their ability to provide long-term
power for environmental monitoring satellites. They contribute to
national security through their ability to provide energy sources
for military surveillance systems.
The United States is preeminent in spacecraft power systems,
based largely on the relative scale and sophistication o f its space
effort. Only the United States and Russia are manufacturing
radioisotope thermal generators essential for the space mission to
the planets, but there is a possibility that the United States w i l l
abandon research in this technology.
SYSTEMS INTEGRATION Systems integration refers to the ability to design, produce, test,
and implement large-scale complex systems that have individual
elements that often use advanced technology components. The
most widely cited example is manned space f l ight .
Intelligent Transportation Systems Intelligent transportation systems use advanced computers,
sensors, electronics, communications, and other technologies to
improve the safety and efficiency o f all modes o f surface
transportation f o r people and goods, including intermodal
transfers. Areas currently being emphasized are: travel and
transportation management, travel demand management, public
transportation operations, commercial vehicle operations,
emergency management, and vehicle control and safety systems.
The latter technology would culminate in an automated
highway system and include different types o f collision avoidance
systems, vision enhancement, improved safety readiness, and pre-
crash restraint deployment. On some stretches o f highway,
automatic platooning of vehicles that are electronically controlled
could increase lane capacity by three or four factors. In addition to
the above major areas, electronic payment services would improve
convenience and efficiency for to l l collection, personal vehicle
use, interstate tracking, and public-transit users.
There seems to be no clear leader in intelligent transportation
systems technologies. The United States, western Europe, and
Japan are pursuing active programs involving both private and
public resources.
M l s M I I J W O R L D Volume 20, Number 1, March 1997 3
H|NM«H'rtin und Aircruft Integration
t o iup l r i r integration ol' an aircraft or spacecraft, as opposed to
HM'M' «oni|H)iu'ul design, requires broad experience, a complete
unilci standing of all component technologies, and a design
iiifiiisiiiK'lurc including methods, tools, and people. The added
mmplcMly of making many subsystems operate simultaneously,
w HIHMII mlerference with each other, requires a special set o f skills
ihiil aic different from skills required to design and bui ld an
individual component.
Multidisciplinary optimization hopes to allow complex system
optimization of hundreds or thousands o f variables resulting in
lower aircraft weight and cost Lower weight and cost w i l l , i n turn,
improve the competitiveness o f U.S. aircraft on wor ld markets and
will result in aircraft that are more friendly to the environment
Ivcnuse they w i l l use less fue l and produce fewer emissions. In
addition, multidisciplinary aircraft design w i l l allow designers to
pinducc better military aircraft, contributing to national security.
litiropc is slightly behind the United States in overall systems
integration capability for c iv i l and military aerospace systems.
Willi the development o f the Boeing 777, the United States took
ihe lend in Ihe design and manufacture o f commercial aircraft.
Hoeing used an integrated approach through f u l l y digital product
ilclimtion. with all parts created by computer systems. Airbus has
not yet used this approach and may not for the next several years.
I lowrvcr. liurope does have the capability to integrate increasingly
complex aircraft systems, as demonstrated in a host o f commercial
.md military aircraft. Japan, on the other hand, has not yet led a
major commercial development and has had d i f f icu l ty wi th
kYHlrms integration o f its military programs.
HUMAN INTERFACE A human interface is an essential element in the successful design
.ind Mile, reliable operation o f any transportation system. The f i e ld
nl iitidy thai leads to proper design focuses on human capabilities,
limitations, behavior, and performance while interacting wi th
tuitiplcx engineered systems and environments. The role of the
human <>|H'rntor in the control loop has changed greatly — f r o m
( l i n ing , navigation, and piloting as traditionally conceived to the
t tHi iml ol complex systems in relatively infrequent off-nominal,
|n4t-uliiilly high-risk situations.
I ho w illingness to use and perhaps depend on technology, as
.̂ <fM>M (l lo human operators, is a cultural phenomenon not simply
Iwmmlcd by the basic technology. A primary case in point is the
»tVuii"«* ol automation entailed in the Airbus f l igh t control systems.
At .(iiioiimiidii becomes more capable, the degree o f keeping
innti.ui> MI Ihe control loop and the ability to override the control
M«t*!«n will become more of an issue. In the case o f highly
<MMI*I<I4 midline,ii control regimens where computer control is
tl« <«il> «n>*ii»ii, iipeinior training and operator acceptance pose
. M l * nit |*IIIII<-MIV in pmiiculai the judgment of when and how to
|IM< .l l l lUlll i l l l l l l l
Human Factors Engineering The Uni ted States has a clear-cut lead i n antigravity
countermeasures in high performance aircraft, and even cockpit
display and instrumentation. As the pressure suits universally
worn by fighter pilots are capable o f being pressurized, i t is more
of a deployment decision rather than one o f underlying
technology. The ultrasonic Doppler f l o w techniques for assessing
individual pilot status during high " g " have been more fu l ly
evaluated, and control algorithms have been refined and reduced
to practice in the United States.
The l imi t o f human capability, however, is becoming an
important factor in safe and effective operation o f transportation
systems. High gravity loads experienced by mili tary pilots reduce
the availability o f well-oxygenated blood to the retina, which
causes "gray out," a tunneling o f vision, and eventually a loss of
blood f l o w to the brain that results in loss o f consciousness.
Countermeasures using small ultrasonic transducers are able to
sense the reversal o f blood f l o w at high " g " and are used to control
the pressure in a lower body garment intended to restrict the
pooling o f blood in the lower abdomen and legs. Lessons learned
f r o m the deterioration of the visual f i e ld under high " g " loads have
also been applied to instrument design, head-up displays, and
alarm systems intended to catch a pilot 's attention even in a high-
noise, high-stimulus environment.
Spacecraft Life Support Spacecraft l i f e support involves issues o f reliable, closed,
physical-chemical, or bioregenerative systems. The goal is an
integrated, stable ecosystem wi th greater simplification, minimal
resupply, and greater degrees o f closure. Current baseline designs
for the space station depend entirely on reliable resupply o f air and
water consumables f r o m the ground. The Russian " M i r , " the only
permanently manned platform currently in space, provides an
example o f the capabilities of water recycling and CO2 removal
wi th total dependency on ground-based resupply o f oxygen.
The mass costs are unacceptable for any extended-duration
manned missions, either on the lunar surface or for Mars transit
and exploration. Whi le the Russians believe they can simply stock
supplies for a two-year mission, serious long-term exploration
requires a commitment to bioregenerative, closed, ecological l i fe-
support systems. These systems must be capable o f recycling and
providing air, water, and food, while controlling toxics and
bacterial or v i ra l contamination. Stable, robust life-support
systems are essential to reducing remote outpost dependencies on
resupply missions. In order o f complexity, partially closed
physical-chemical "systems would be first, fo l lowed by closed
physical-chemical systems.
Jack V. Michaels, Ph.D., P.E., CVS, is the publisher and executive
director for Management Science, an Orlando, Florida-based
organization specializing in technical and business texts and
training materials.
* H<m«*t* su N « - . J * . 1 \ l « , 1. I«M* M s l M I U w O R L D
TRANSPORTATION FOR A GROWING REGION
Patrick O'Neill, P.E., and Eric Meng, CVS, AIA
T iw VM I IH Northwest portion o f the Untied States is
< » l * m m in>; unparalleled growth, wi th predictions fo r 20%
l*^anUinMi im leases within the next five years. Transportation has
lw« ««••*! i l * ' pi unary issue affecting both budgets and quality o f l i fe ,
*t«<*iigl*mi tin- ivgion. Yet even with transportation budgets at their
feifteti ibt- iiiins|>oilation systems are able to grow at only a 5%
i-m m*A id«i|>a>ers are resisting even higher taxes.
\ fiinl pail of tilts disparity must be overcome by increasing
4m #Hfe KMH s ol all funded transportation projects. Fortunately, in
1A*«tfiingit><i uiate, those responsible for transportation planning
« « l fiMMliiiir have recognized the important role value engineering
<•«• in .k ' l in ing creative, efficient systems.
I«« IIMHV ih,HI a decade, the Washington State Department of
lnmt|»«i<iiniii. ihe Port o f Seattle (Seattle/Tacoma), and the
V « t i l 4 , / I ' i i | t r i Sound metropolitan agencies (Metro) have
*ftMM«MM*<l a* live, maiulatory value engineering programs. The
toAMMNII piograin. using in-house trained staff wi th both in -
tmmtm <MMI MnlV|>ciKlcnt facilitators, has applied V E to all major
*mtl, ««ii|>l« \ pto'eets, and has diligently tracked the results.
\ «>f.» ni l* passed initiative is now in design for a mul t ib i l l ion-
*MW» KgKHiiil commuter transit system that encompasses light
muni tn-mmulei tail and regional bus. This voter initiative failed
M. l i i k i allempt, but, with the assistance of formal value
* M f * m was leconliguicd and succeeded at the polls a year later.
• In* o l IIH- more effective V E programs is managed by the
l***t|«>M4iiM>M Improvement Board (TIB) , which administers
t«MMli«f lot local transportation improvement projects. Although
M .•*•*> o l M'wral transportation V E programs, i t is coordinated
• M b Or* i<*lwi piogiams to increase the availability o f experienced
W*NI H«Mnd lacilitalors and team members. Patrick O ' N e i l l
.H««tlm»iri ilk* I I H program, selecting appropriate projects, team
*m**4wi* ami lacihtators.
V A l U f I N C I N E E R I N G A N D T H E T I B
Ik* m i •« , i NVashingion state agency directed by a 21-member
(**m*l l ln- |Mim,iiv ptiriMisc of the T I B is to administer state
(iMtmlwitf l<« Im al government transportation projects through
m**»-*i *<<o<i-iii> Revenues for these projects come f rom the state
**t*t «*» MKI il«> moioi vehicle excise tax. Projects are funded by
I III •« %»imc in in i i ih i i ia i ion with local matching funds and
fQUt qfr mul.M , .HlllllltllmllS
I » ^ H ( » * « ~ ^ I |m«M ' d l»y the Washington Legislature in 1988
-t^Ht***!! * f a I I I ! io tti'scliip niles and procedures requiring V E
m«*»w ** •*> |wiht«iiM'd l»> an iiiieragency team for certain
projects. The legislature also required the T I B to consider project
cost, length, and complexity in determining the need for V E
studies.
The T I B init ial ly required all funded projects exceeding $1
mi l l ion in total costs or $3.5 mi l l ion per mile to undergo V E
studies. Staff members also had authority to require studies for
projects that were considered to be complex, i f i t involved major
structures, extensive right of way, complicated traffic control or
detours, or expensive construction methods. The agency director
had authority to waive these requirements i f i t was determined that
significant savings could not be gained f r o m a study. The threshold
was recently raised to $2 mi l l ion in total project costs.
In i t ia l ly , facili tators were used f r o m the ranks o f the
Washington State Department o f Transportation (WSDOT). Whi le
that worked for a while, the board found i t took too many W S D O T
staff members f r o m their duties and tied up T I B staff in trying to
fill teams wi th volunteers. In late 1991, the T I B advertised for
certified value engineers (CVSs) to facilitate V E studies on a
consulting basis. Six consultants were chosen in the initial round
and a seventh was added a year later. Consultants are assigned
projects by the T I B staff on a rotating basis.
The average length o f a noncertified, facilitator-led V E study
was three days, and the average certified facilitator-led V E study
was four days. Costs of the studies have not been tracked on a
regular basis, but a 1993 survey of 26 studies done by CVSs
showed total V E costs ranged f r o m $6,100 to $24,900 per study.
These costs included the facilitator, team members, agency
support costs, and additional consultants, when required.
The T I B funds projects but does not have responsibility for
design or construction o f those projects. The local agencies are
responsible for design and construction, and have been given
responsibility for forming a V E team and contracting directly with
an assigned V E consultant.
The facilitator is involved in determining the ex|H"itise needed
for the team and can be enlisted to form the team. The T I B has no
r ig id process fo r the studies themselves but believes
implementation is critical. To that end, the local agency decision
makers are encouraged lo be in attendance at Ihe end of the study
for a V E team presentation of findings. I he T I B also requires the
local agency to address all V l i recommendations IK*fore funding
the construction phase of a project. Recommendations do not have
to be accepted by the agency, but rejections must lx" explained.
The T I B has been involved m doing V I - studies since 1985 and
has overseen Ihe completion ol almost I(X) V l i studies to date (see
Figure I ) . Until I9'>2, studies were conducted by the agencies
* O ft t 0 Volume 2 0 , NIIIIIIK-I I, March I W 7 5
Value Engineering Studies Certified Facilitators vs. Non-certified Facilitators
1985 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Completion Year
Figure 1
Value Engineering Studies Recommended Savings vs. Accepted Savings
1985 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Completion Year
Figure 2
6 Volume 20, Number 1, March 1997 K B E D w o R L D
receiving volunteer help f r o m other organizations. Since then, the
T I B requires certified value specialists be assigned as facilitators.
O f the 22 studies done prior to using certified facilitators, $9.7
mi l l ion in savings were recommended for an average of $440,000
per study, and $1.6 mi l l ion in savings were accepted by the
agencies. Since then, 70 studies have been led by certified
facilitators recommending a total of $105.7 mi l l ion in savings for
an average of $1.51 mi l l ion in savings per study, while $35.5
mi l l ion in recommendations were accepted by the agencies (see
Figure 2).
One goal o f the T I B as a state agency is the completion of
quality projects that meet the needs of the local agency. The T I B
is not after cheap projects. V E studies are one means being used to
accomplish that goal. A major and welcome byproduct o f V E ha's
been the dollar savings as noted above. The $37 mi l l ion savings'
have been made available to be used by the local agencies for more
projects. The return has been wel l worth the investment o f $6,000
to $24,000 per study. 1996 numbers are incomplete as o f this
wri t ing.
Much of the credit should be given to the local agencies for
their cooperation and acceptance of the value engineering process.
Eric Meng, CVS, AIA, leads the architecture, engineering, and
research firm MENG. The firm specializes in the design of
complex public facilities including education, transportation, and
technology. Meng has led more than 350 value analysis studies for
buildings, transportation, utilities, ports, construction products,
management systems, and environmental remediation. He teaches
and facilitates creative value-engineering techniques nationally
and internationally. He is particularly interested in the application
ofVA as a design tool. Eric is active as past president of the Seattle
Chapter of SAVE and serves on the board of SAVE International
as Vice President-Marketing.
Patrick O'Neill, P.E., has 25 years of engineering experience in
the public-works field, the last five with the Washington State
Department of Transportation. O'Neill holds primary
responsibility for the Urban Arterial Trust Account (UATA)
program. He earned his bachelor of science degree in civil
engineering at St. Martin's College in Lacy, Washington, and has
been a registered professional engineer since 1976. O'Neill first
trained in value engineering in a management training course at
Clark County in 1977.
Value Engineering and Partnering in Highway Construction
Kirk Juranas, P.E.
The Missour i Department o f Transportation ( M o D O T )
introduced partnering into the state's highway construction
program in 1991. Since that time, value engineering has been a
major area of emphasis that adds value and extends l imited
resources to accomplish the same function.
The partnering process uses many V E principles. The project
teams are brought together representing designers, construction
managers, and f i e ld personnel f r o m contractors, subcontractors,
utilities, local municipalities, and the state. The key concept is
working together toward a common goal that is established by the
partners. This requires communication of each member's priorities
and the priorities o f the public to draw up a partnering agreement
that all members support. The use o f V E is a key tool for making
improvements to the project and is included in the partnering
agreement.
V E provides opportunities for the state to control costs and
allows the contractor to increase profit . Since the savings benefit
all parties, the partnering team can work together to generate and
refine cost-saving methods. The diversity o f the group provides
much o f the expertise needed to develop proposals into working
alternatives for proposed construction.
This year, the 1996 Marvin M . Black Excellence in Partnering
Award f r o m the Association of General Contractors was presented
to M o D O T and Fred Weber Inc. for jo int achievements on the
construction of a new single-point urban interchange at Route 67
and 1-55 in Saint Louis County. The project was completed six
weeks ahead of schedule, wi th no fatalities and no unresolved
disputes. As a result, M o D O T and the contractor were able to split
$600,000 in V E savings. The V E proposals involved changes in the
construction staging and traffic control, changes in temporary
pavements, and rock-fd l base in lieu o f stabilizing permeable base.
Kirk Juranas, P.E., is value engineering administrator for the
Missouri Department of Transportation, P.O. Box 270, Jefferson
City, MO 65102, U.S.A.
E B E Q w o R L D Volume 20, Number 1, March 1997 7
Value Engineering in the Transportation Sector
Harlen E. Smith, RE., CVS
INTRODUCTION
This article w i l l examine the transportation sector w i th respect
to value engineering during 1997 to determine the prospects
for V E in this sector.
I w i l l f i rs t look at the volume of work expected in the
transportation sector by looking at federal appropriations, which
give us a yardstick to measure the work expected in this sector in
1997. I also w i l l take a cursory look at the legislation that is
intended to advance the requirements for value engineering. In
both areas, I w i l l show examples o f what we are seeing in our
efforts to provide value engineering services concentrated in the
transportation sector.
BUDGETS One encouraging yardstick for measuring the potential for value
engineering in the transportation sector in fiscal-year 1997 (FY
'97) is the federal budget. I n an effort to avoid a government
shutdown and demonstrate legislative accomplishments to voters,
both Democrats and Republicans put aside their differences and
agreed to fund ing increases f o r many federal programs,
particularly in the area o f infrastructure. Congress completed
seven of the 13 federal agency funding bills as stand-alone bills,
and the remaining bil ls were rolled into a large omnibus
continuing resolution (CR), which Congress approved just hours
before the October 1, 1996, deadline.
A summary o f F Y '97 federal agency appropriations is shown
in Table 1.
Transportation appropriations on the federal level include:
• FY '97 Department of Transportation (DOT) Appropriations.
Overall, funding for infrastructure programs is more than
1996. I n addition to transportation programs, programs that
saw increases include the Veterans Administration, the U.S.
A r m y Corps o f Engineers, the General Services
Administration's construction budgets, the Environmental
Protection Agency's water infrastructure state revolving loan
funds, the National Aeronautics and Space Administration
( N A S A ) , and the Federal Emergency Management Agency
( F E M A ) .
D O T programs did very wel l , receiving $1 bi l l ion more
than F Y '96 in total funding ($37.9 bi l l ion vs. $36.67 bi l l ion) .
Most major programs did better than last year, and highway
and transit programs actually ended up with more money in
the f ina l b i l l than they had in either of the individual House or
Senate bills.
• Federal Highway Administration (FHWA). The f i n a l
obligation ceiling is $18 bi l l ion , which is higher than either
the House or Senate numbers and $450 mi l l ion more than the
F Y '96 level. The total available funding for the highway
program is approximately $20 bi l l ion , which is also higher
than F Y '96 figures by $86 mi l l ion .
The f ina l b i l l also included $150 mi l l ion in federal funds
f o r the 10 states selected to participate i n the State
Infrastructure Bank program. Addit ional states have six
months to apply to participate in this demonstration program.
• Federal Transit Administration (FTA). Total FTA funding o f
$4,382 bi l l ion is also higher than that in the House or Senate
bills and $331 mi l l ion higher than F Y '96 funding.
• Federal Railway Administration (FRA). The original House
b i l l made severe cuts in funding for Amtrak and the Northeast
Corridor Improvement Program (NECIP). However, i n the
end, NECIP is budgeted to receive $175 mi l l ion , $60 mi l l ion
more than F Y '96 and considerably better than the zero
funding in the House. Amtrak received a total o f $223 mi l l ion
for its capital program.
Transportation appropriations on the local level include:
• California. Santa Clara County passed a sales-tax measure to
fund a combined highway/transit program that w i l l include
funding for light-rail extensions. Measures A and B w i l l
impose a nine-year half-cent sales tax. Measure A lists 16
specific projects to be funded. Measure B mandates a half-
cent hike i n sales tax, f r o m 7.75% to 8.25%. Projects
encompass highway improvements, traffic management, and
transit.
• Georgia. Gwynett and DeKalb counties passed a sales tax for
infrastructure improvements.
• Missouri. A Kansas City retail sales tax o f $0.00125 was
passed in Kansas and Missouri counties to repair and restore
the Kansas City Union Station, including parking facilities.
This tax w i l l raise approximately $18 mi l l ion .
• North Carolina. A $950 m i l l i o n bond referendum f o r
statewide highway improvements passed in this state. In this
package, $500 m i l l i o n w i l l be used to accelerate the
construction o f outer loops around seven of North Carolina's
major metropolitan areas; $300 m i l l i o n w i l l f u n d
improvements to the primary highway system (increasing i t to
four lanes); and $150 mi l l ion w i l l be used to pave rural roads.
• Washington. The Seattle Regional Transit Authority (RTA)
ballot approved a sales-tax measure to fund a redefined
regional transit plan.
• Intermodal Surface Transportation Efficiency Act (ISTEA) II
8 Volume 20, Number 1, March 1997 ISIOUGElw O R L D
Table 1 — Federal agency appropriations (capital improvements and infrastructure)
F Y ' 9 6 Agency Request House Bil l Senate Bil l F inal F Y ' 9 7
Department of Transportation/Federal Highway Administration
Total
Obligation ceiling
ITS
State Infrastructure Bank
Federal Transit Administration
Total
Sec 9
Sec 3
New Starts
Plan & research
Federal Railway Administration
Amtrak capital
High-speed rail
Northeast Corridor
Improvement Program
Federal Aviation Administration
A I P
$19.9 bi l l ion
$17.5 bi l l ion
$218 mi l l ion
0
$4.05 bi l l ion
$2.05 bi l l ion
$1.66 bi l l ion
$666 mi l l ion
$85.5 mi l l ion
$230 mi l l ion
$24 mi l l ion
$115 mi l l ion
$19.4 b i l l ion
$17.7 b i l l ion
$250 mi l l ion
$336 mi l l ion
$4.29 bi l l ion
$2.15 bi l l ion
$1.79 bi l l ion
$800 mi l l ion
$85.5 mi l l ion
$296 mi l l ion
$26 mi l l ion
$200 mi l l ion
$1.45 bi l l ion $1.35 bi l l ion
$19.6 b i l l ion
$17.5 b i l l ion
$228 mi l l ion
0
$4.05 bi l l ion
$2.05 bi l l ion
$1.66 bi l l ion
$666 mi l l ion
$85.5 mi l l ion
$120 mi l l ion
$19.7 mi l l ion
0
$1.3 b i l l ion
$20 bi l l ion
$17.6 bi l l ion
$244 mi l l ion
$250 mil l ion
$4.38 bi l l ion
$2.14 bi l l ion
$1.9 bi l l ion
$800 mi l l ion
$85.5 mi l l ion
$250 mi l l ion
$26.5 mi l l ion
$200 mi l l ion
$1.4 bi l l ion
$20 bi l l ion
$18 bi l l ion
$235 mi l l ion
$150 mi l l ion
$4.38 bi l l ion
$2.14 bi l l ion
$1.9 bi l l ion
$760 mi l l ion
$85.5 mi l l ion
$223 mi l l ion
$26.18 mi l l ion
$175 mi l l ion
$1.46 bi l l ion
Environmental Protection Agency
Water loan fund/grants
Department of Veterans Affairs
Construction
Federal Emergency Management
Administration Disaster Relief
General Services Administration
Federal Construction
Corps Construction
Department of Energy
Environmental restoration
National Park Service
Construction
Military Construction
Trade & Development
World Bank
& various development banks
$2.81 bi l l ion $2.85 bi l l ion $2.76 bi l l ion $2.81 bi l l ion $2.87 bi l l ion
$326 mi l l ion $439 mi l l ion $405 mi l l ion $368 mi l l ion $425 mi l l ion
$222 mil l ion $320 mi l l ion $1.12 bi l l ion $1.32 bi l l ion $1.32 bi l l ion
$545 mi l l ion $715 mil l ion $540 mi l l ion $657 mi l l ion $657 mi l l ion
$804 mi l l ion $914 mi l l ion $1.03 bi l l ion $1.04 bi l l ion $1.08 bi l l ion
$5.55 bi l l ion $5.40 bi l l ion $5.40 bi l l ion $5.60 bi l l ion $5.45 bi l l ion
$192 mi l l ion $143 mi l l ion $119 mi l l ion $165 mi l l ion $163 mi l l ion
$2.72 bi l l ion $2.76 bi l l ion $3.24 bi l l ion $3.27 bi l l ion $3.35 bil l ion
$40 mi l l ion $40 mi l l ion $38 mi l l ion $40 mi l l ion $40 mil l ion
$1.43 bi l l ion $1.75 bi l l ion $936million $1.25 bi l l ion $1.15 bil l ion
I S E U O W O R L D Volume 20, Number 1, March 1997 9
Status and Update. The I S T E A o f 1991 expires on September
30, 1997. Congress must pass — and the president must
sign — reauthorization legislation by that date, or funding for
federally aided highway and transit programs w i l l end. The
discussion to date on ISTEA I I has been general i n nature,
focusing on broad program structure rather than on specific
items.
LEGISLATION The Off ice o f Management and Budget's Circular A-131 was
revised in 1993. This circular requires federal departments and
agencies to use value engineering as a management tool to reduce
program and acquisition costs. I t also requires the inspector
general to perform random audits o f federal agencies to determine
the level o f value-engineering activity. This circular is scheduled
for another sunset review in 1998.
The fo l lowing value engineering bills have been introduced,
but not passed:
• H.R. 133, introduced by Representatives Cardiss Collins o f
Ill inois and John Conyers o f Michigan
• H.R. 2014, introduced by Representative Leslie Byrne of
Virginia
• H.R. 719, introduced by Representative Cardiss Collins of
Ill inois
As o f February 10, 1996, we have Public Law 104-106, the
Defense Authorization Act, Section 4306. The newly added
Section 36, titled Value Engineering, states that each executive
agency shall establish and maintain cost-effective value
engineering procedures and processes.
Legislative efforts pertaining to value engineering have
definitely affected the transportation sector, not so much because
of the legislative mandate to perform value engineering, but
because most major transportation sector projects are at least
partially financed by government agencies. To qualify for funds,
projects w i l l have to comply wi th the mandates. Legislation by
itself w i l l not move people to change but might cause them to
begin to take notice. Whatever the case, people are human, and we
should not think that they w i l l make changes in the way they work
just because o f some piece o f legislation or because we, as value
engineering practitioners, want to help them and their projects be
more cost efficient.
I have recently worked wi th a number of state Department o f
Transportation agencies seeking to perform value engineering on
their projects and have found that these agencies vary widely in
their use o f value engineering. Some have embraced i t and are
using i t widely. One agency is planning to increase its annual value
engineering studies f r o m approximately 20 to 100 or more. Other
agencies either do not use value engineering to a great extent or do
not f u l l y understand what they can do, and do not — at least
openly — show any signs of changing the way they do business.
Some of these agencies say that they have been performing
transportation projects in their states for many years without using
value engineering and do not see the need to change. Others have
had differ ing experiences wi th value engineering and are taking
somewhat o f a cautious wait-and-see posture before committing
their projects to this tool.
In the June 1996 issue o f Interactions, John Hoving wrote an
article titled "The Defense Authorization Act — It's in Our
Hands." In that article, John writes, " I f a Democratic president and
a Republican Congress can agree that value engineering is good
for American taxpayers, then it's time for all members o f SAVE to
vigorously and creatively let government decision makers,
businesses and the media know of the importance o f value
engineering."
John makes a point here that is very important to us as value
engineering practitioners. We seem to be very prol if ic in our
writings and speeches about value engineering. I t is time for us to
take i t to the next level. We need to let the rest o f the world know
about value engineering and what i t can do to help make their
programs more cost-efficient and successful1:
We must continuously communicate value engineering
capabilities and success stories to those decision makers who can
do something about i t . We need to submit articles about value
engineering to industry and professional publications that our
clients and government agencies subscribe to and read, as wel l as
to call on them to discuss where they are wi th respect to value
engineering in their programs.
We should not expect to see a tremendous growth in the use o f
value engineering i f we do not actively promote i t to those
decision makers who have the ability to insist that this set o f
techniques be used. John concludes this article by wri t ing, "Now
is the time you can make a difference. Be proud and vocal about
what value engineering can do."
Now that we have discussed the budget appropriations for F Y
'97 in the transportation sector and the legislative mandates for
value engineering, how does this relate to the prospects for value
engineering services in F Y '97?
In the article referenced above, John includes the fo l lowing
table, released annually by the Off ice o f Management and Budget
and depicting the dollars saved by value engineering in F Y '95.
I expect that the same data for F Y '96 w i l l be available in A p r i l
Table 2 — Dollars saved through value engineering
Federal department/agency Dollars saved - F Y '95
Department o f Defense $734,385,000
Department o f Transportation 686,373,874
General Services Administration 109,608,453
A r m y Corps of Engineers 59,554,000
Department o f the Interior 22,427,840
Department o f Agriculture 8,764,155
Department o f Justice 5,990,387
Department o f Veterans Affa i rs 2,270,800
Department of Health and Human Services 1,884,464
Agency for International Development 800,000
State Department 91,721
10 Volume 20, Number 1, March 1997 U H M O W O R L D
or May, and that we w i l l see an increase across the board in the
dollars saved by V E . Wi th the F Y '97 increases in federal budgets
in the transportation sector over the F Y '96 budgets previously
discussed, and the increased emphasis by legislation to utilize
value engineering more widely by federal agencies, I believe this
produces an atmosphere that w i l l provide the opportunity and
requirement for value engineering to expand its use in F Y '97 in
all federal agencies, including the transportation sector. Coupled
wi th a perceived interest by most advertisements for major
projects to include value engineering, we can be optimistic about
the prospects for growth in the foreseeable future.
FORECAST I am not suggesting that all this V E work is going to just f a l l into
our laps. There is much work to be done to help clients wrestle
w i th their many concerns about how to get their projects
completed. Value engineering is just one o f the tools available to
them to help meet their goals.
We, the practitioners of value engineering, must become more active in helping our
prospective clients understand what value engineering can and cannot do for them.
We, the practitioners o f value engineering, must become more
active in helping our prospective clients understand what value
engineering can and cannot do for them. They have questions and
concerns that require careful consideration in order to meet all
their needs. Recently, we talked to a state transportation agency
that does approximately 20 in-house value engineering studies per
year. I t wants to expand the number o f studies to more than 100
per year — not a tr ivial task. In discussions, the agency seemed
reluctant to use outside consultants and has already come to
recognize that i t has not done more because o f its workload. The
staff is there to design and manage transportation projects;
performing value-engineering studies is not their highest priority.
They have streamlined the process so that most studies are
completed in less than 40 hours.
Another state transportation agency recently conducted a V E
study for the first time in about 10 years. For reasons beyond the
scope of this article, the agency took more than a year to decide
what to do about the alternatives proposed. In the end, i t rejected
them all.
As in these examples, there is more involved than just deciding
to perform V E studies. Agencies are sometimes wrestling wi th
circumstances on the periphery that affect their entire programs.
We need to be prepared to consult wi th them on some of these
situations.
SUMMARY I have tried to give you reasons for optimism about the prospects
for value engineering in the transportation sector in F Y '97. You
have seen F Y '97 federal agency budgets compared wi th F Y '96
budgets to show the relative increases in budget appropriations and
give some indication as to the legislative thrust for value
engineering usage by federal agencies. There are no guarantees;
however, we do believe that prospects for V E in the transportation
sector are going to be healthy in F Y '97.
REFERENCE Connor, Cathy, ed. PB Legislative Update. Dallas, Texas: Parsons
Br inkerhof f Construction Services Inc., September 16,
October 4, October 18, and November 8, 1996.
Harlen E. Smith, P.E., CVS, is the immediate past president of the
Dallas/Fort Worth Chapter of SAVE International. He is now
serving as Vice President—Administration of SAVE International
and has served the society in other positions. Smith is employed by
Parsons Brinckerhojf Construction Services Inc., where he is an
assistant vice president and manager of Value Engineering
Services. Parsons Brinckerhojf has been chosen by Engineering
News-Record (ENR) for eight consecutive years as the number
one engineering design firm in transportation.
B Q E B w o R L D Volume 20, Number 1, March 1997 11
Value Engineering on Commuter Rail: An Owner's Story
Ginger R. Adams, CVS
I n 1995, the firm I work for — V E I , Inc. — was one of several
considered to perform a series o f value engineering studies for
the Fort Worth (Texas) Transportation Authority, also known as
"The T," on the R A I L T R A N Commuter Rail project. V E I was
fortunate to be selected for the work and conducted three V E team
studies over a period o f approximately three months. Rather than
tell our own story, I am pleased to offer the fo l lowing, which was
published on the Internet in February 1996 by the Federal Transit
Administration (FTA). On the FTA Web site, there is a category
called "Lessons Learned," which covers a wide variety o f topics
related to FTA activities. The ninth lesson is repeated below
exactly as i t appears on the Web page (except for formatting,
which has been modif ied to f i t this article).
The FTA Web site is at http://www.fta.dot.gov. Lessons
Learned is at http://www.fta.dot.gov/library/program/119.htm.
LESSONS LEARNED NO. 9 — FEBRUARY 5, 1996
Value Engineering ( V E ) on Transit Projects
Background
The R A I L T R A N Commuter Rail Project extends between Fort
Worth and Dallas [Texas] along an existing 34-mile corridor
which was acquired jo in t ly by the cities in 1983 f r o m the trustee
of the former Chicago Rock Island and Pacific Railroad. The
Federal Transit Administration also participated in the acquisition
of this real estate. The cities have designated their local transit
agencies, The Fort Worth Transportation Authority (The T) and
Dallas Area Rapid Transit (DART) , to develop the commuter rail
services for the cities.
Services are being implemented in several phases. Phase 1,
being implemented by DART, extends 10 miles f r o m Dallas to
South Irving. Phase 2, being implemented by The T, extends f r o m
South Irving to Fort Worth. Phase 2 is comprised o f a series o f
elements:
• A n Intermodal Transportation Center ( ITC) located at the site
of the Texas and Pacific Railway Terminal Building (listed in
the National Register of Historic Buildings).
• A 1 . 5 mile "downtown" connection between the I T C building
and the existing R A I L T R A N corridor.
• Improvements and additions to the existing rail facilities
wi th in the existing R A I L T R A N corridor to allow joint use o f
operations wi th freight trains and passenger service. This
work includes passing sidings, signals, upgraded track, etc.
• Five new passenger stations between the ITC and South Irving.
• Expansion o f the Equipment Maintenance Facility developed
by DART.
• Acquisition of diesel locomotives and passenger coaches.
A t the concept phase, the project had an estimated cost o f $101
mi l l ion (1992 dollars) at completion. Based*on a more detailed
preliminary engineering work, the estimated project cost increased
to $140 mi l l ion , significantly above what was considered feasible.
A t this point the planned Value Engineering program was initiated.
Overview
Value engineering is defined as an organized effort to analyze the
function o f systems, equipment, facilities, procedures and supplies
by a multidisciplined group for the purpose o f achieving the
required function at the lowest total cost. Considerations are given
to effect ive ownership consistent w i t h requirements f o r
performance, reliability, quality, maintainability and safety. FTA
guidelines endorse the use o f value engineering in analyzing the
design and cost effectiveness o f federally funded projects.
In keeping wi th the FTA guidelines, The T, through its standard
consultant selection process, solicited proposals f o r value
engineering services to be performed on three o f its major design
components of the Commuter Rail Project. These components
included the Intermodal Transportation Center in downtown Fort
Worth , the Downtown Rai l Corridor, and the R A I L T R A N
Corridor.
Following selection o f the V E consultant, The T collaborated
wi th the consultant in the development o f a customized work
program which was tailored to the specific issues and needs of the
RAILTRAN/Commuter Rail project. The five-phase V E process
( Informat ion, Speculation, Analysis, Development and
Presentation) was fol lowed; however, additional program features
were introduced to maximize the V E results.
A Preparation phase was added to familiarize the design
consultants and the owner wi th the V E process and to establish a
"team" concept among the design consultants and the owner. A
Decision phase was also added fo l lowing the V E Presentation
phase during which the team members discussed each proposal
prior to the owner's decision on acceptance, acceptance wi th
modification or rejection. This was fol lowed by an Implementation
phase during which the design consultants confirmed the cost
savings of each V E proposal through more detailed estimates. The
V E manager then monitors the implementation of the proposals
through final design.
Also, each V E team was staffed to ensure that the necessary
12 Volume 20, Number 1, March 1997 I M s M l g J W Q R L D
specialized expertise was represented. This was considered
especially important on this project which included many diverse
and specialized components.
The Lesson
The Fort Worth Transportation Authority recognized early in their
preliminary engineering design that the available budget could not
support the escalating costs o f the Project and remain debt free.
Prudent management decisions lead to the use o f value
engineering as one means to bring the costs back in line wi th
available funding. A n important part of the V E studies included
the direct involvement o f The T's management staff and design
consultants. The design consultants presented the design concepts
to the V E team as wel l as provided them wi th preliminary design ,
documents, preliminary estimates and schedules. The V E team
made a site visit to each of the project components and was
accompanied by the project management staff and consultants
who pointed out various aspects o f the existing conditions and
proposed plans. The V E team then began to develop proposals for
presentation to The T and its project management staff.
Prudent management decisions lead to the use of value engineering
as one means to bring the costs back in line with available funding.
The V E process was successful in identifying cost savings
proposals. Proposals that were not accepted, were rejected
primari ly because they did not maintain The T's program
requirements. Many proposals were not accepted as presented but
were noted as warranted for further study. A l l accepted proposals
w i l l be incorporated into the project during final design.
There were 87 V E proposals offered for consideration, o f
which 38 were accepted. The total estimated savings identified by
the V E proposals was approximately $11 mil l ion . The estimated
project cost that the V E team analyzed was approximately $78
mi l l ion . The percentage o f savings equates to approximately 14%.
The cost to perform the V E study was $129,000, resulting in a
return o f $85 for every $1 invested in the studies.
Summary
The T's success in achieving a significant reduction in the project
cost is attributable to a number o f factors:
• A prudent management decision to utilize the V E process was
fundamental.
• The t iming o f the V E studies at the conclusion of preliminary
engineering and before final design provided the V E team
wi th the necessary level o f design development information
and, at the same time, allowed adoption o f the proposals
without causing serious delays due to lost design effort.
• The establishment o f a team concept invo lv ing the
collaboration o f the owner, V E consultant and the design
consultant resulted in a cooperative productive effort.
• The addition of formal preparatory and fol low-up phases to
the basic five step V E process resulted in a complete program
designed to deliver the maximum V E results.
Applicability
The application o f value engineering can be applied to most major
Transit Capital projects across the nation. I t has proven to be a
successful method for reducing project costs while maintaining a
project's functional objectives. The success o f V E can be
maximized by tailoring the basic V E process to the specific needs
o f each project and by integrating the V E effort into the overall
project design development process.
Reference
The Fort Worth Transportation Authority Intermodal Project
Of f i ce , Paul Byrne, Intermodal Project Manager, 817/
871-8858.
Ginger Adams is immediate past president of SAVE International
— "The Value Society" (formerly the Society of American Value
Engineers). Adams has more than 25 years'experience in business
operations and management, including 17 years in the field of
value analysis/value engineering. A certified value specialist since
1990, Adams is vice president of VEI, Inc., a Dallas, Texas-based
value engineering consulting firm, where she participates in
corporate financial and management planning.
K O E D w O R L D Volume 20, Number 1, March 1997 13
Can Value Analysis Play a Part in Transportation Research?
Rod Curtis, RE.
Research is a major component o f the transportation industry.
One marvels at the efforts expended toward developing new
methods and materials, and at the success o f those efforts. Those
not familiar w i th the transportation industry might think o f i t as
somewhat staid when compared wi th the electronics world.
Nothing could be farther f r o m the truth!
The transportation industry is constantly changing and needs to
keep doing so to have any chance o f meeting the challenges we
face. This is especially true given the growing dif f icul ty o f
obtaining resources f o r the design and construction o f
transportation infrastructare. The need for infrastructure continues
to increase, but the resources available do not keep pace — a
familiar theme in the public sector.
The purpose of this article is not to take the reader through a
review course of the wor ld o f transportation research. Rather, I
would like to suggest some opportunities for the use o f value
methodology in the research f ie ld . As is always the case wi th value
work, I am not offering or touting a panacea. Wonderful things are
happening in transportation research, and this w i l l continue to be
the case wi th or without the use o f value analysis. Responsible
value practitioners are not trying to f i x a problem, and must
constantly struggle to avoid the perception of the know-it-al l
"efficiency expert," riding in on a white horse to solve all the
world's problems. Value analysis is, however, a tool well-suited to
helping those involved in research get the most for their expended
resources and for the taxpayers, who are usually footing the b i l l .
As practitioners, our goal must be to increase the knowledge and
usage of this powerful tool. Those o f us in the public sector, or
working fo r the public sector, have the added mission o f
maximizing the value o f the taxpayer dollar. I hope that this article
encourages experimentation in this area.
A major premise o f this concept is that a disconnect is l ikely to
occur between research engineers and their customers in the
design, construction, and maintenance sections o f state
departments of transportation (DOTs). The two groups are l ikely
to work in separate physical environments, and the nature o f their
work differs significantly. By design, a research environment is
somewhat more cloistered and may be closely related to a
university. Engineers responsible for design, construction, and
maintenance tend to have much more frenetic styles o f work,
trying their best to do more wi th less. Some time ago, I conducted
an informal survey o f research directors fo r state DOTs around the
country. Whi le not al l o f the respondents perceived that there was
a significant problem in this regard, all agreed that value analysis
(based on my brief description in the survey) could be helpful in
improving their connections to their customers.
There are two aspects of research work that are candidates for
the use o f value analysis.
The first involves deciding what subjects should be researched.
Resources are limited, and ideas must compete for selection for
research. A t the Arizona Department of Transportation (ADOT) ,
where I work, the research group sends annual requests asking
engineers in the design, construction, and maintenance groups to
suggest subjects for study. This is a well-intentioned gesture. But,
f r o m conversations wi th in the design community, the decisions
about what w i l l actually be researched are not necessarily
connected in a formal way to the input received f r o m these surveys.
Even i f the decisions are responsive to this input, how do we, as an
agency, know that we are expending our resources on the most
important topics and not on the personal agendas of a small
number o f well-placed people?
... we don't yet have complete knowledge of how value analysis can function as apart of
the agency culture, not just as a separate unit conducting value engineering studies. If we would learn how to do this, connections ... could greatly increase our efficiency, to say
nothing of building consensus and teamwork across functional boundaries.
We could use the value methodology, practiced by
multidiscipline teams, to surface and prioritize research needs.
A D O T recently conducted a survey o f more than 30 technical
standards to ascertain the opinions o f its staff about the potential
for value improvement. Now A D O T is fo l lowing up on the
information i t received and w i l l soon generate a list o f standards on
which to conduct value studies. During this process, I became
aware that the research group was procuring a consultant to study
bridge approach and anchor slabs, which happened to be one of the
highest scoring standards on our survey. Checking for overlap, I
discovered that the research effort was to be directed only to the
joints in these devices, not the overall item. This may or may not
be a worthy expenditure, but i f the " lef t hand" knew about the
interest i n value improvement evidenced by our survey, and the
14 Volume 20, Number 1, March 1997 M i l M I M I W O R L D
"right hand" knew about the imminent research effort, we might
wel l have decided to look at the bigger picture, not just the joints.
This is not a criticism of the people involved. There is nothing to
f i x . I t is just that we don't yet have complete knowledge o f how
value analysis can function as a part o f the agency culture, not just
as a separate unit conducting value engineering studies. I f we
would learn how to do this, connections such as the one suggested
by this example could greatly increase our efficiency, to say
nothing of building consensus and teamwork across functional
boundaries.
The second opportunity for the value methodology is really an
extension o f the first, but on a more technical level. Once we have
decided what to research, value analysis can play an important role
in the actual work by bringing to bear its big gun — funct ion ,
analysis. The concept of the language o f function can be used to
ensure that the research is heading in the critical direction. What
functions exactly are to be examined, and why? Although
proactively searching for new ways to achieve needed functions is
a worthy activity, i n a wor ld of scarce resources i t makes sense to
scratch where i t itches. To return to the previous example, i f we
decided to research bridge approach and anchor slabs, we could
answer the "what" and "why" questions wi th a brief value-analysis
session conducted by a multidiscipline team of the appropriate
players. Are we going to analyze only the joints in these structures?
Or perhaps we should critically examine the entire concept. The
skills needed to conduct the research may vary greatly, depending
on which functions we feel need to be looked at.
Once we know the precise functions that concern us, how
much is i t costing us today to provide those functions? Again, even
though pure research is desirable, we are most o f the time seeking
lower-cost methods o f achieving needed functions. Another
possibility, of course, is that we have identified a function we need
but is not being delivered today. Precisely what is that function?
How much are we wi l l i ng and able to pay for that function? The
no-nonsense rigor o f a properly executed function analysis can
help the "more wi th less" folks communicate wi th the researchers
so that both can win .
When thinking about a possible model by which this concept
could be buil t into the research efforts o f a public works
organization, one key decision clearly needs to be made. We could
involve essentially the same people in all three activities, namely:
identifying the items to be researched, identifying the specific
functions to be analyzed, and determining the existing costs o f
those functions and other cost data. Or we could use three separate
groups, probably wi th some overlap in membership. The former
has the advantage o f developing a stronger expertise and
consensus among the smaller number o f players but may require a
considerable amount of their time. The latter approach has the
advantage of involving more people in the value-analysis process
and may help wi th the larger goal o f including the methodology in
the organization's culture. Either way, the value practitioner
should be clear about how the process w i l l work and communicate
i t to all involved. I have learned the hard way that aspects of value
analysis that seem clear and simple can nevertheless f a i l to be
absorbed by key personnel. I t may not be rocket science, but i t is
different than the concepts and approaches that most public works
professionals are used to working with. And, for overworked
public servants, "different" sometimes means "not now, I ' m too
busy."
A very brief model for the incorporation o f this concept might
be as fol lows:
1. Identify research items — Using surveys, customer feedback,
cost models, matrices, and multidiscipline team(s), create a
consensus as to what items are worthy of research effort and
in what priority.
2. Identify functions for analysis — Using funct ion
brainstorming and FAST diagramming, determine which
functions are in question. Check back w i t h survey
respondents and others as needed to ensure that the work is on
track.
3. Determine function/cost/value relationships — Using
available cost model information, assign cost to function and
create consensus on targets for research, such as: f i nd a way
to provide Functions X , Y, and Z reliably, at a present worth
(life-cycle) cost equal or less than $C.
4. Research effort — Complete the research work, and check
back against the targets and logic developed in earlier steps.
Have we really unearthed something o f superior value or just
something different?
In summary, i t is my belief that value analysis methodology
uses just the right combination of rigor, logic, creativity, team
building, and consensus building to make i t an ideal tool for
bringing together the disparate worlds o f research, design,
operations, and maintenance in a transportation/public works
agency. I intend to use this brief article as the guide for an
experiment in my agency, and I encourage other practitioners to
do the same.
Rod Curtis, RE., is the value engineer for the Arizona Department
of Transportation, a position he has held for more than eight
years. He earned degrees in civil engineering and public
administration, and has nearly 30 years' experience in public
works engineering and management. Curtis currently serves as
president of the Arizona Chapter of SAVE International and as
chairman of the AASHTO Value Engineering Task Force. He is
currently completing the requirements for his CVS certification.
M i M H J W O R L D Volume 20, Number 1, March 1997 15
Value Briefs
The fo l lowing briefs are excerpts f r o m the recently held 1996
Discover Awards to innovators around the world. In the
automotive and transportation fields, inventions include a spin-
control mechanism, a side-impact airbag, catalytic converters,
drowsiness monitors, and Volkswagen's quiet diesel engine. The
fo l lowing text f r o m the July 1996 issue o f Discover magazine is
copyrighted 1996 by The Walt Disney Co. and is reprinted wi th
permission o f Discover magazine.*
WINNER Spin Control
Mercedes-Benz's Electronic Stability Program
Innovator: Armin Mueller
You're driving down the highway and a box falls o f f the truck in
front o f you. As you swerve to avoid it , your car might fishtail —
what engineers call yaw — and even go into an uncontrollable
spin. I f this happens, your antilock brakes won' t do much good,
because they act w i th equal force to slow each wheel. What's
needed are brakes that can be applied to each wheel independently.
Engineer A r m i n Mueller and his team at Mercedes-Benz have
devised a braking system, called the Electronic Stability Program,
that can be used exactly that way. Its eight sensors, at various
positions in the car, keep track of what the driver is doing and how
the car is moving, and a watchful central computer looks for the
precise set of conditions that indicate yaw.
Once the computer decides the car is sliding or spinning, it automates the brakes to
stabilize it. For instance, if the car's rear is sliding to the left, it applies the brake to
the left front wheel.
For example, to tell whether the driver is frantically trying to
regain control o f the car, a set o f sensors measures the angle o f the
steering wheel and the pressure applied to the brake pedal. Other
sensors measure whether the car is accelerating sideways, or
whether the wheels are turning at different speeds. "The key
breakthrough," says Mueller, "was being able to develop a yaw-
rate sensor for automotive applications."
Once the computer decides the car is sliding or spinning, it
automates the brakes to stabilize i t . For instance, i f the car's rear is
sliding to the left , i t applies the brake to the lef t f ront wheel. On a
mixed surface — when one wheel is on, say, asphalt and another is
on dirt — the system varies the braking pressure applied to each
wheel, bringing the car to a smooth, stable halt. As a last resort, the
system slows the car by throttling back or shifting gears.
The Electronic Stability Program is now available as standard
equipment in Mercedes' S600 and SL600 V-12 models and can be
installed on V-8 models for an additional $1,870.
FINALISTS Saved by the Sausage: BMW/Simula Government Products'
Side-Impact A i r Bag
Innovators: Klaus Kompass and Gershon Yaniv
A i r bags have succeeded in reducing injuries f r o m fronta l
collisions, but many head injuries still occur because of inadequate
protection f r o m side impacts. In 1993, when B M W Safety
Engineering Director Klaus Kompass and his colleagues
considered protecting passengers' heads wi th side air bags, they
found that conventional air bags would not do the trick; they were
too slow to deploy, the explosives needed to unfur l them were
themselves dangerous, and the bags tended to get pinned to the
side in a collision, rendering them useless. A radical new design
was called for.
Fortunately, Gershon Yaniv, research director at Simula
Government Products in Phoenix, had already begun developing a
side-impact air bag, which he and Kompass adapted for B M W ' s
cars.
Leave i t to a bunch o f Bavarian engineers to name the f ive-foot-
long hot-dog-shaped air bag the weisswurst, after their favorite
local sausage. Off ic ia l ly known as the Inflatable Tubular Structure,
i t is pinned on one end to the top side corner o f the dashboard and,
on the other end, to the ceiling above the door catch. The whole
thing tacks up behind the interior door t r im.
"Much o f the inflation time of frontal air bags is the time they
need to unfold," says Kompass. "Our bag inflates in just 20
milliseconds." A small explosion f i l l s the bag wi th superheated
gas, which keeps it inflated for several seconds — long enough to
protect the head in cases in which the car rolls.
To make the concept work, Kompass and Yaniv had to develop
a balloon that could expand instantly, accept the hot gas without
bursting, and be easy to stow in narrow spaces. They also came up
wi th a thin sleeve strong enough to hold the balloon in its wiener
shape. "The hardest thing was to make the components reliable and
still thin enough," Kompass says.
16 Volume 20, Number 1, March 1997 B O I I B W O R L D
B M W engineers have put the f inishing touches on the
Inflatable Tubular Structure in time for the company's 1997
models.
Body Heat: Ergenics's and National Renewable Energy
Laboratory's Cold-Start Catalytic Converters
Innovators: Mark Golben, David Benson and Tom Potter
Catalytic converters are good at removing most o f the noxious
gases f r o m car exhaust, but they have a big drawback: they work
only when the car is warm. Consequently, automobiles emit as
much as 70% of their pollutants i n the first two minutes after
starting up. Two engineering companies have independently come
up wi th different ways o f solving this cold-start problem and
making converters more efficient. '•
Mark Golben got his inspiration f r o m a newspaper article '
about a researcher who used an electric heater to warm a catalytic
converter to working temperature i n a few seconds. Rather than
using costly electricity, however, Golben thought o f heating the
converter wi th the alloy metal hydride. "When a hydride absorbs
or releases hydrogen, the reaction creates instant temperature
swings — often dramatic — that are very predictable," he says.
Golben and his research team at Ergenics in Ringwood, New
Jersey, designed a heater to be mounted in the exhaust system just
upstream of the catalytic converter. The heater includes two
containers o f metal hydrides — one at a higher pressure than the
other — separated by a valve wired to the vehicle's ignition key.
When the engine starts and the valve opens, the hydride in the
pressurized container releases hydrogen, which f lows to the low-
pressure container and is absorbed. This reaction releases
sufficient heat to warm the car's exhaust to 750° , enough for the
converter to begin working. As the engine warms up and the
exhaust temperature rises to 1000° F or higher, the low-pressure
alloy heats up and pushes the hydrogen back through the valve to
its original container, resetting the mechanism for the next trip.
Golben finished the heating system last summer, and Ergenics
is looking for partners to help commercialize i t . Expected to cost
no more than $100, the heater could be retrofitted to an old car.
"Right now our heater assists a vehicle's catalytic converter,"
Golben says. "Eventually, i t could become the converter."
David Benson and Tom Potter at National Renewable Energy
Laboratory in Golden, Colorado, took a different approach. They
developed a catalytic converter so wel l insulated that i t stays warm
almost indefinitely. To trap heat, the converter is surrounded by
"vacuum insulation" — two sheets o f metal w i th a vacuum
between them — "which works l ike a thermos bottle," Benson
explains. The half-inch space between the insulation and the
converter is f i l l ed wi th an aluminum magnesium alloy, which
melts and absorbs heat when the converter gets hot. Later, when
the converter cools, the alloy solidifies, giving up heat to the
converter.
To keep this well-bundled converter f r o m overheating,
Benson's group also adds a bit o f metal hydride to the vacuum
layer to help regulate the temperature. As the converter's
temperature rises above 1100° F, the hydride begins to release
hydrogen into the vacuum. The hydrogen conducts the excess
warmth away. When the engine is turned o f f and the converter
begins to cool, the hydride reabsorbs the hydrogen and restores the
vacuum layer's effectiveness.
In tests, the National Renewable Energy Laboratory's converter
was found to stay warm for 61 hours after the engine was turned off .
Since 98% of all car trips occur within 24 hours of each other, that
amounts to a possible reduction of more than 70% in auto
emissions. We're being encouraged by the Big Three automakers,"
Benson says. "We're on a fast track with this."
Awake at the Wheel: Nissan's Drowsiness Monitor
Innovator: Hideo Obara
To keep drivers f r o m nodding off , Nissan developed a device back
in 1983 that triggered an alarm when the steering wheel moved
erratically. But the auto company found that by the time the driver
begins moving the wheel, i t is sometimes too late to prevent an
accident.
In 1990, Nissan Engineer Hideo Obara and his team came up
wi th a way of catching drowsy drivers earlier. They mounted a
camera on the dashboard to peer into the driver's eyes and make
sure they were open and alert.
When the driver starts the car, the camera takes a snapshot o f
his face and records an image o f his eyes. Throughout the trip, the
camera continuously scans the driver's face while an onboard
computer compares the pictures wi th the original image to make
sure the eyes are still open and that they aren't drooping or being
diverted for too long f r o m the road. The computer uses all this
information to generate an alertness rating, and i f it falls too low,
a loud buzzer startles the driver back to f u l l consciousness. A t
night an infrared lamp illuminates the driver's face.
Although the system is st i l l stamped by drivers who wear
sunglasses, "the most d i f f icul t problem in creating i t was helping
the computer locate the driver's eyes and do i t wi thin a set period
of time," recalls Obara. "Our technique begins by measuring the
driver's facial outline and then defining the possible areas where
the eyes might be."
Obara and his team completed tests o f the drowsiness monitor
in 1995, but unt i l there is consumer demand for what would be a
pricey system, Nissan has no plans to build the monitor into any
of its cars.
Nissan developed the monitor as part of a demonstration of
several new safety technologies, including a device that releases a
bracing fragrance when the driver dozes, and another that brakes
the vehicle and flashes its warning lights i f the driver can't be
roused.
Diesel Delight: Volkswagen's Quiet Diesel Engine
Innovator: Karl-Heinz Neumann
Because diesel fuel is cheaper than gasoline and burns more
efficiently, wi th less carbon monoxide in its exhaust, diesel-
powered cars are, i n principle, a good idea. The problem is noise.
Instead o f using spark plugs to ignite their fuel , diesel engines rely
on pistons to compress the fuel-air mixture, creating enough heat
to set o f f a loud explosion. A diesel engine would roar l ike a tank
without modifications that end up sacrificing its wonderful fue l
I T f c l M H J W O R L D Volume 20, Number 1, March 1997 17
efficiency.
Ever since the U.S. auto industry's brief infatuation wi th diesel
cars in the 1970s, their waning popularity has bothered Karl-Heinz
Neumann, the director o f diesel engineering at Volkswagen. Af te r
studying the problem for 15 years, Neumann and his team of
engineers came up wi th a quieter way to ignite the fuel . Instead o f
dumping fue l into the cylinder and exploding i t in one big bang,
Neumann's method is to squirt i n the same amount o f fue l but
slowly, over a longer period of time. As a result, the fuel burns in
a series o f small, quiet explosions. Called turbo direct injection, or
T D I , this engine ensures more thorough burning o f fuel .
To make the process work, Neumann had to devise an
elaborate electronic circuit that translates the pressure o f the
driver's foot on the gas pedal, and dozens of other factors, into
perfectly timed explosions o f fuel i n the cylinders. A particularly
delicate challenge was to design the engine geometry to ensure
optimum efficiency — each piston ends in a bowl shape, for
instance, to promote better mixing of the fue l . "The amount of fue l
the T D I injects is calculated against the precise diameter of the
injection holes and also the shape of the hole," Neumann says.
"This is the basis of the T D I system."
Volkswagen introduced Neumann's turbo direct injection
engine in its 1996 Passat, which gets 45 miles to the gallon on a
highway and 37 miles to the gallon in city traffic — all the while
puf f ing out 20% less carbon dioxide than today's typical gasoline
engine.
*To subscribe to Discover magazine, call 800/829-9132.
Subscription price is $29.95for one year.
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18 Volume 20, Number 1, March 1997 B I I I J B W O R L D
Value Engineering and Product Design
By Paul N. Romani
Recent legislation mandating the inclusion o f value
engineering provisions in government contracts has opened
a new domain. However, the degree o f control being applied is
already stif l ing the technique's f u l l potential. I t is unfortunate that ,
many in the value engineering profession are overlooking this fact
in their rush to celebrate a legislative victory.
This article has two purposes: to reject the pigeonholing o f
value engineering solely as a "procurement" technique, and to
point out the absence of definitive accountability for value
engineering's success in the public law containing provisions for
the method.
In a memorandum to executive department and agency heads
dated October 15, 1996, Franklin D . Raines, director, Off ice of
Management and Budget, wrote, "the Federal Acquisition Reform
Act , Public Law 104-106, section 4306, (which amends the Off ice
of Federal Procurement Policy Act) , requires that each executive
agency must establish and maintain cost effective value
engineering procedures and processes." The term "value
engineering" is defined in Public Law 104-106 as: " A n analysis of
the functions of a program, project, system, product, i tem of
equipment, building, facility, service, or supply o f an executive
agency, performed by qualified agency or contractor personnel,
directed at improving performance, reliability, quality, safety, and
l i fe cycle costs." The emphasis on procurement reform is clear.
Nowhere in the act or the definit ion is there an emphasis on
applying the methodology in the design phase o f product
development. Design is the area where return on investment w i l l
be greatest. The value engineering community must reject the
time-honored purchasing theory in favor of another that is broader
and compatible, but not congruent. To paraphrase Thomas S. Kuhn
in The Structure of Scientific Revolutions: "Persons who share the
same paradigms are committed to the same rules and standards."
For the value engineering methodology to mature and reach its
potential, the purchasing paradigm must be abandoned, and its
supporters — both theorists and practitioners — must convert or
maintain an open mind when i t comes to considering a paradigm
wi th design at its core. Why design? Because i t :
• Enhances the utilization o f feedback data f r o m usage tests or
trial runs;
• Increases the possibility of product or equipment revisions
due to changes in the user's needs;
• Al lows integration o f technological innovation not apparent at
the time of the original design;
• May improve product functionality and lower costs in spite of
time and money restrictions imposed on the init ial design.
Consider the words o f Takeomi Nagafuchi, general manager o f
quality control at Ricoh: "Seventy percent o f quality control is
determined at the design stage. So, naturally, the biggest effort is
made at that stage. I f you improve manufacturing only, you won' t
get much improvement." Nagafuchi knows what he is talking
about. He was the project manager who helped w i n the Deming
Prize for Quality Control for Ricoh, the first photocopier company
ever to w i n the coveted award.
John Mayo, vice president o f A T & T ' s Bell Laboratories, sees
American industry stranded in what he calls an "inspect and f i x "
mode. This means that components that f a i l during tests are simply
replaced by better quality (and more expensive) parts. Few
attempts are made to redesign products around less expensive
components. Thus, f i n a l designs released fo r manufacture
commonly exceed budgeted cost. The Japanese redesign for
quality. "One Japanese watchmaker found that i t isn't necessary to
use an expensive quartz crystal to achieve high accuracy in a
wristwatch. A n inexpensive capacitor could compensate fo r
cheaper crystals without sacrificing overall accuracy," says Mayo.
The messages o f both Nagafuchi and Mayo are clear: You can't
inspect quality into a product. The earlier you value engineer a
product, the greater are your prospects for an enhanced return on
investment.
You can't inspect quality into a product. The earlier you value engineer a product, the
greater are your prospects for an enhanced return on investment.
How do the Japanese capitalize on design savings? The answer
is simpler than one would expect. Product designers tear apart
existing equipment (of any type) and thoroughly test every part. A
copier wi th 3,000 parts would require every nut, bolt, and screw to
be examined. They believe this is the best way to determine which
parts are necessary and which parts can be replaced. For example,
Canon replaced the dry toner in its early copiers wi th an energy-
efficient l iquid that reduced power consumption f r o m 250 to 110
volts. Minol ta retaliated by replacing 27 micros witches wi th a
simpler electronic part. Why? Products wi th fewer parts are more
reliable and cost less to build and operate.
Contrast Minolta's design changes wi th a-design f l aw that
Xerox faced. In 1960, Fortune magazine named Xerox's model
t ! O V J B w O R L D Volume 20, Number 1, March 1997 19
914 photocopier "the most successful product ever marketed in
America." Two years later, the company made the Fortune 500 for
the f i r s t t ime, coming i n at 423. Unfortunately, Xerox
management made two costly mistakes: I t rested on its laurels
rather than seeking ways to improve, upgrade, and lower the cost
of its product; and i t ignored the Japanese and concentrated on
besting I B M and Kodak. Humiliat ion fol lowed, and the Cinderella
growth story that accompanied the machine's popularity ended
abruptly.
The 914's fuser paper had a tendency to catch f i re when i t
came into contact w i th hot fuser rollers. Since Xerox was the only
company in the marketplace wi th technology to produce images
on ordinary paper, continuous design improvement was seen as
superfluous. Developmental stagnation proliferated. In case of
f i re , Xerox urged operators to do nothing and let the f ire burn out.
Instead of redesigning the fuser rollers, Xerox equipped each
machine wi th a f i re extinguisher, which i t euphemistically labeled
a "scorch eliminator." The precaution did not placate many
customers. To publicize this design defect, Ralph Nader, author of
Unsafe at Any Speed, traveled to Rochester, New York, and
publicly assailed the Xerox 914, claiming its design was shoddy.
He said the 914 in his Washington office caught f i re three times
during a four-month period.
With the institutionalization of value engineering, excuses are no longer acceptable.
To borrow a word from the Japanese, we should desire to be "dantotsu" — the best of
the best — in every business venture.
In the meantime, the Japanese had captured the low end of the
copier market in less than ten years. Executives at Xerox were
shocked to f i nd that the Japanese could sell a copier (Canon) at a
prof i t for less than i t cost Xerox to make one. Underestimating the
Japanese cost Xerox dearly. Its piece o f the $25 bi l l ion copier
market dropped f r o m 82% to 4 1 % between 1976 and 1982. I t has
since rebounded, but not to previous market-share levels and only
after intensive redesign efforts.
Wake-up calls such as this have made American management
more sensitive about the distinction between new product research
and process research. (Some managers use the terms "pioneering
research" and "sustaining research.") Combined traditional R & D
budgets help to obscure these fundamental differences in
emphasis. No matter. The important point is that organizations are
becoming more aware o f the need to l ink process R & D with new-
product R & D , and value engineering can be the key to the link.
University o f Pennsylvania economist Edwin Mansfield found
that "Japanese f i rms spend f u l l y two-thirds o f their R & D budgets
on process R & D " — significantly more, he claims, than their
American counterparts.
Japan Steel's Oita Works has as its slogan "001" — for zero
accidents, zero pollution, and number one performance. A t Toyota
Moto r Company last year, a ha l f -mi l l ion suggestions were
received f r o m employees about materials savings, general quality,
and labor saving. A n d this was without the monetary incentives
such as value engineering change proposals. I f the Japanese can do
i t , we can too. Wi th the institutionalization of value engineering,
excuses are no longer acceptable. To borrow a word f r o m the
Japanese, we should desire to be "dantotsu" — the best o f the best
— in every business venture.
H a l f a century o f sporadic use o f value engineering
methodology in government agencies proves i t has merits too
valuable to be ignored; however, the management backing needed
to support full-f ledged value engineering programs has not been
present. One reason is the failure of subordinates to fo l low through
on suggestions f r o m busy executives. The illustration that fol lows
is f r o m Jonathan Daniels' book about Franklin Roosevelt and his
cabinet, titled Frontier on the Potomac:
"Hal f of a President's suggestions, which theoretically carry
the weight o f orders, can be safely forgotten by a Cabinet
member. A n d i f the President asks about a suggestion a second
time, he can be told i t is being investigated. I f he asks a third
time, a wise Cabinet officer w i l l give h im at least half o f what
he suggests. But only occasionally, except about the most
important matters, do Presidents ever get around to asking
three times."
Through their actions, managers need to convince staff
members o f the organization's seriousness in making value
engineering methodology an integral part o f the work process.
Management also needs to ensure adequate funding. Richard M .
Cyert and James G. March theorize in A Behavioral Theory of the
Firm that most government entities use more resources than
actually are required to meet their assigned functions. They term
these excess resources "organizational slack." Most agencies have
suff ic ient resources to divert some of them to the value
engineering effort without adversely affecting the accomplishment
o f their duties.
Value engineering can save a company money. I n M a y 1996,
the Hoving Group reported General Accounting Off ice estimated
savings in the 3% to 5% range when value-engineering techniques
were used in government programs. These funds alone, i f
reprogrammed, are more than sufficient to sustain first-rate
governmentwide value-engineering initiatives.
In the Fall 1968 issue o f The Defense Management Journal,
George R. Al len and Paul N . Romani wrote, "Management must
do more than endorse value engineering and place i t i n an
appropriate organizational unit. Top company officials have the
responsibility for establishing and vigorously pursuing definite
cost-reduction goals. They also should provide value engineers
wi th access to all company specialists to assure the utilization of
the widest possible pool o f knowledge in the cost-reduction
effort ." Later they say, "Insufficient support by top management,
or delays in action on value engineering [change] proposals, w i l l
severely reduce the possibility for expanding effective value
engineering programs." What was true then, is true now: Public
20 Volume 20, Number I , March 1997 B f c M I I J W O R L D
Law 104-106 notwithstanding. Spirited support at the top of the
organization is central to value engineering's success. Now, the
development and delivery of consumer-oriented quality products
may be crucial to the prosperity and economic health of the
American economy.
SELECT BIBLIOGRAPHY Government Publications
Third Report of the National Performance Review. Common Sense
Government/Works Better and Costs Less. Washington, D.C.:
Government Printing Office, 1995.
U . S. Department of Defense. National Defense Authorization Act
for Fiscal Year 1996, Public Law 104-106. Washington, D.C.:
Government Printing Office, February 10, 1996.
U . S. Off ice of Management and Budget, Off ice of the Director.
Agency Value Engineering Programs. Washington, D.C.:
October 15, 1996.
Books
Asman, David, ed. The Wall Street Journal on Management 2.
New York, N.Y.: Plume Books, 1991.
Bowles, Jerry, and Hammond, Joshua. Beyond Quality. New York,
N . Y : Berkley Books, 1992.
Cyert, Richard M . , and March, James G. A Behavioral Theory of
the Firm. Englewood Cl i f f s , N.J.: Prentice-Hall, Inc., 1963.
Daniels, Jonathan. Frontier on the Potomac. New York,
N . Y : The MacMil lan Company, 1946.
Gibney, Frank. Miracle by Design. New York, N.Y.: Times Books,
1982.
Kuhn, Thomas S. The Structure of Scientific Revolutions. Chicago:
University of Chicago Press, 1971.
Articles
Allen , George R., and Romani, Paul N . Barriers to V E Growth.
The Defense Management Journal (Fall 1968).
Other
Hoving, John. A Call for Action from John Hoving. Washington,
D . C : May 1, 1996.
Paul N. Romani is president of R3, a firm specializing in cost
containment, proposal development, and network selection and
configuration. Earlier in his career, he served for nine years at the
White House — three as deputy director of the computer center
and six as director of administrative operations for the White
House and the 17 agencies of the Executive Office of the
President. He holds a doctorate in public administration and an
M.B.A. in information sciences.
Got a way with words? Would you like to help
promote VE?
Value World is looking for an associate editor to
assist wi th technical review of papers submitted to
the journal. I f you are interested in compiling and
reviewing potential articles, please contact
Editor-in-Chief Del Younker at 407/859-5537 or
Barbara Scott-Turbett at
SAVE International headquarters
at 847/480-1730.
t ! O f j D w O R L D Volume .'(). Numliei I . Maieh I / 21
Annual Index
Compiled by Jim Heinrich, VMP
ARTICLES Application o f V E Techniques in Evaluation Contract Proposals.
Gernerd, Kur t A . Vol . 19, No. 1 (March 1996): 13-16.
Competitive Management for Product, Performance, Productivity
and Cost. Riordan, J.J., and Tocco, A.R. Vol . 19, No. 2 (June
1996): 14-21.
Cost Charting Technique. Mudge, Arthur E. Vol . 19, No. 1 (March
1996): 25-29.
Development and Status of V E in the Hungarian Industry.
Nadasdi, Ferenc, and Udvarhelyi, Zsuzsanna. Vol . 19, No. 3
(October 1996): 24-31.
Employee Motivation, Value Engineering, and the Reinventing
Government Process. Romani, Paul N . Vol . 19, No. 3 (October
1996): 14-16.
Environmental Value Engineering o f the Design and Selection o f
Materials in Buildings: The Process and Future. Tenah, Kwaku.
Vol. 19, No. 2 (June 1996): 6-9.
The Heart of the A r t of Management. Selg, Richard. Vol . 19, No.
1 (March 1996): 6-12.
Marketing o f Value Engineering Through Human Resource
Development. Narasimhan, R.L. Vol . 19, No. 3 (October 1996):
17-21.
Meeting the Requirements for Future Competitiveness Through
Value Analysis. Mustafa, Anwar. Vol . 19, No. 2 (June 1996):
25-29.
The Role o f Value Management i n Improving Australia's
Economic Performance. Bushell, John. Vol . 19, No. 1 (March
1996): 17-24.
Taking V A / V E Into the 21st Century. Greenfield, H.B. , and
Mendelsohn, S. Vol . 19, No. 2 (June 1996): 4-5.
Team Building — The Secret of Successful V A / V E Program.
Mukhopadhyaya, A n i l Kumar. Vol. 19, No. 3 (October 1996): 12-13.
Thunder: Ghost Surveys That Backfire. King , Thomas R. Vol . 19,
No. 2 (June 1996): 33.
Thunder: How Not to Deliver Constructive Criticism. King ,
Thomas R. Vol. 19, No. 3 (October 1996): 23.
Thunder: Promoted into Danger. King , Thomas R. Vol. 19, No. 1
(March 1996): 30.
True Grit . Doer, John. Vol. 19, No. 1 (March 1996): 1.
Value Analysis: A n Effective Tool in Process Re-engineering.
Prud'homme, Roch. Vol. 19, No. 2 (June 1996): 22-24.
Value Analysis Techniques App l i ed to Project Concept &
Development. Thiry, Michael. Vol . 19, No. 2 (June 1996): 10-13.
Value Based Decision Making for the Small Engineering F i rm.
McElroy, Robert C. Vol . 19, No. 3 (October 1996): 9-11.
Value Engineering in Construction Management. Ard i t i , D . , and
Al i f en , R. Vol . 19, No. 3 (October 1996): 1-7.
Value Engineering: Paradigm Pliancy in Act ion. McClintoch, Scot.
Vol. 19, No. 2 (June 1996): 1-3.
Value Improvement for the 21st Century. Adams, Ginger. Vol . 19,
No. 1 (March 1996): 2-5.
The Value Management Model . Godfrey, Donald. Vol. 19, No. 2
(June 1996): 30-33.
AUTHORS Adams, Ginger. Value Improvement for the 21st Century. Vol. 19,
No. 1 (March 1996): 2-5.
Ard i t i , D . , and Al i f en , R. Value Engineering in Construction
Management. Vol . 19, No. 3 (October 1996): 1-7.
Bushell, John. The Role o f Value Management in Improving
Australia's Economic Performance. Vol. 19, No. 1 (March 1996):
17-24.
22 Volume 20, Number 1, March 1997 K B E B w O R L D
Doer, John. True Grit. Vol. 19, No. 1 (March 1996): 1.
Gernerd, Kurt A. Applications of V E Techniques in Evaluation
Contract/Proposals. Vol. 19, No. 1 (March 1996): 13-16.
Godfrey, Donald. The Value Management Model . Vol . 19, No. 2
(June 1996): 30-33.
Greenfield, H.B. , and Mendelsohn, S. Taking V A / V E Into the 21st
Century. Vol. 19, No. 2 (June 1996): 4-5.
King, Thomas R. Thunder: Ghost Surveys that Backfire. Vol. 19,
No. 2 (June 1996): 33.
King, Thomas R. Thunder: How Not to Deliver Constructive
Criticism. Vol. 19, No. 3 (October 1996): 23.
King, Thomas R. Thunder: Promoted into Danger. Vol . 19, No. 1
(March 1996): 30.
McClintoch, Scot. Value Engineering: Paradigm Pliancy in
Action. Vol . 19, No. 2 (June 1996): 1-3.
McElroy, Robert C. Value Based Decision Making for the Small
Engineering Firm. Vol. 19, No. 3 (October 1996): 9-11.
Mudge, Arthur E. Cost Charting Technique. Vol. 19, N o . l (March
1996): 25-29.
Mukhopadhyaya, A n i l Kumar. Team Building — The Secret of
Successful V A / V E Program. Vol. 19, No. 3 (October 1996): 12-13.
Mustafa, Anwar. Meeting the Requirements fo r Future
Competitiveness through Value Analysis. Vol. 19, No. 2 (June
1996): 25-29.
Nadasdi, Ferenc, and Udvarhelyi, Zsuzsanna. Development and
Status of V E in the Hungarian Industry. Vol. 19, No. 3 (October
1996): 24-31.
Narasimhan, R.L. Marketing of Value Engineering Through
Human Resource Development. Vol. 19, No. 3 (October 1996):
17-21.
Selg, Richard. The Heart of the Art of Management. Vol. 19, No.
1 (March 1996): 6-12.
Tenah, Kwaku. Environmental Value Engineering of the Design
and Selection of Materials in Buildings: The Process and Future.
Vol. 19, No. 2 (June 1996): 6-9.
Thiry, Michael. Value Analysis Techniques Applied to Project
Concept & Development. Vol. 19, No. 2 (June 1996): 10-13.
Call for Papers Value management professionals are invited to propose papers for presentation at the:
Hong Kong Institute of Value Management
International Conference 1997
November 12-13, 1997 Pacific Place Conference Centre
Hong Kong
Abstracts due April 30, 1997
For more information, contact: Conference Secretariat, International Conference Consultants Limited, at (852) 2559 9973, fax (852) 2865 1528, e-mail: [email protected]
Prud'homme, Roch. Value Analysis: A n Effective Tool in Process
Re-engineering. Vol. 19, No. 2 (June 1996): 22-24.
Riordan, J.J., and Tocco, A.R. Competitive Management for
Product, Performance, Productivity and Cost. Vol . 19, No. 2 (June
1996): 14-21.
Romani, Paul N . Employee Motivation, Value Engineering, and
the Reinventing Government Process. Vol. 19, No. 3 (October
1996): 14-16.
t Q E D w O R L D Volume 20, Number 1, March 1997 23
ntematiorial A n n u a l Conference May 4 • T, 1997 Red Lion Hotel • Seatac Seattle, Washington
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